Liam Byrne is never going to live down those fateful words - "Dear Chief Secretary, I'm afraid there is no money. Kind regards and good luck! Liam" - and nor should he.

One tax-cutting friend of mine suggested this afternoon that all Chief Secretaries of the Treasury should get the text as a tattoo, to form a permanent reminder of the fate which befalls those who splash too much taxpayers' cash.

Writing in the Daily Telegraph this morning the Labour MP for Rochdale, Simon Danczuk wrote:

"The Labour Party is a moral crusade or it is nothing,” said Harold Wilson. It’s time this sense of crusading zeal was applied to helping people off benefits – not pushing them into poverty – and back into work. Seeing people that are capable of working languish for years on benefits is not something the Left should be proud of. It’s something we should be fighting. Otherwise why call ourselves the Labour Party?

He went on:

We should all experience the feeling of satisfaction after a hard day’s work, the pride at getting a promotion, the sense of achievement from making a difference in the workplace. But for those trapped in welfare dependency these experiences will never happen. This is a criminal loss of human potential and something everyone interested in progressive politics should rail against.

Although he did not vote for Ed Miliband to be Party leader Mr Danczuk is not one of the "usual suspects", but a Party loyalist who seldom rebels.

Labour’s five-day jamboree
ends today. There will be a closing speech by Harriet Harman at lunchtime, as
well as some prior talks, before everyone leaves Manchester to the Greatest Football Team in the World,
and decamps to their constituencies and to London. So apologies if this quick
list of the things we’ve learnt from the Labour conference is a little premature,
but I can’t see things changing much this morning. Here goes:

1) In terms of presentation,
Labour are turning blue. In my ConHome
column on Tuesday, I wrote that the most important aspect of the Labour conference
was how “Ed Miliband’s party is straying onto territory usually occupied by the
Conservatives” — and that was even before the “One Nation” speech that Mr
Miliband delivered later that day. From the emphasis on property ownership to Yvette
Cooper’s claim that Labour are “now the party of policing”, from the
rediscovered patriotism to the blue backdrop of the main stage, there appeared
to be a concerted effort to broaden the party’s appeal rightwards. “Red Ed no more,”
was the message. “Vote for Blue Ed.”

2) In terms of substance, Labour are staying red. But look beyond the performances and the stage lighting, and the
(few) policies that Labour are espousing are still dripping red. There’s the
example I used in my column: the party’s drive towards property ownership is
based around more and more spending, and implicitly critiques Thatcher-era
policies such as the Right to Buy. But we saw it too in those moments when
Labour’s speakers tore up the Tory copybook, such as when Andy Burnham railed
against “privatisation” in the NHS. Some of this is Labour staying on their
comfort ground but, to my eyes, some of it is more than that. They’re trying to
create a new generation of Labour voters by wrapping left-wing policies in
centrist, or even right-wing, language.

In today's Telegraph Liam Byrne announces that Labour will support the Coalition's benefit cap as long as it is regionalised. The Shadow Work & Pensions Secretary writes:

"While all that £500 a week might get you in central London is a one-bedroom apartment, in Rotherham, Yorkshire it would get you a six-bedroom house. How can a “one-size-fits-all” cap be fair to working people in both London and Rotherham?"

Boom! A big principle has been conceded by Labour. If we don't need a one-size-fits-all benefits cap then we don't need one-size-fits-all benefits and we don't need one-size-fits-all public sector pay rates. I wonder what the unions think of Mr Byrne's intervention?

Conservatives have had some fun at Ed Miliband's expense this week. Today's Sun revelled in Ed Miliband's "Blackbusters" gaffe. "Silly Mili", it laughed. Guido Fawkes relaunched Iain Martin's Don't Underestimate Ed Miliband Association as the Don't Unseat Ed Miliband Association. "Save Ed Miliband" is the three word prayer of every Number 10 strategist. Tories are probably right to think that "Odd Ed" is a very weak candidate for 10 Downing Street but if it's hard to regard the Labour leader as a potent threat we shouldn't think the same of the Labour Party as a whole.

It may have been a difficult week for the Labour leader but this was one of the more interesting weeks for the Labour Party as a whole. There were real signs that the reality-based wing of the party was finally asserting itself...

First up was Liam Byrne with his argument that Labour needed to return to a welfare state that William Beveridge would actually recognise. Iain Duncan Smith's shadow argued against the spiralling housing benefit budget, the way the system maintained people in long-term unemployment and, third, insufficient encouragement of thrift. As George Eaton blogged there wasn't much substance in Byrne's article but it was a movement towards the ground occupied by the majority of the British people.

Third - and least reported - was the Shadow Education Secretary's argument for a longer school day. The Coalition has already advocated this itself but Stephen Twigg's focus on how it could prepare more disadvantaged children for the world of the work was in tune with his party's best working class roots.

"It's truly astonishing that Boris Johnson can find the time to write a book when he was elected to run London ... Every hour Boris Johnson has spent writing his new book is an hour which he could have spent working to make our streets safer and getting new investment and jobs into London.“

In response to Byrne's claims, Boris' campaign director, Lynton Crosby said that "Ken Livingstone's and Labour’s tactics to attack Boris Johnson are not only baseless, they are deceitful." Boris, he said "has held, on average, more than double the number of meetings per month than his predecessor did while he was in office" according to the official diaries of both men. Statistics from Livingsotne's diary of meetings, are as follows: